India Has More Fintech Adopters At 87% Compared To Global Average Of 64%: Report

India has the highest number of fintech adopters in the world at 87% compared to the global adoption of 64% owing to the Covid-19 pandemic and consequent lockdowns.

According to a report by NewsVoir, the fintech market is estimated to grow $150 Bn by 2023 with new businesses springing up and global investment pouring in.

The Banking, Finance Services, and Insurance (BFSI) industry has suddenly transitioned into fintech products and services that have allowed customers to adopt digital services. 

India’s digital payments increased to 25.5 Bn in real-time online transactions in 2020 as fintech applications and services have captured a large unbanked population under its net and prompted mass transition, it said. 

It is interesting to note here that the country’s fintech startups raised around $8 Bn across 280 funding deals in 2021, as per an Inc42 report. Among the fintech sub-sectors, lending tech and digital payments bagged the most venture capital inflow last year, accounting for 68% of the total funding and 44% of the total deal count.

The NewsVoir report further pointed out that fintech employers are looking for fresh talent with knowledge beyond basic coding. They are looking for domain-specific skills like data architecture, analysis, Artificial Intelligence (AI), Application Programming Interfaces (APIs), Full-Stack Development, among others, in their employees. 

It pointed out that only 2.5% of engineers in India possess AI skills, while only 5.5% are qualified with basic programming abilities. These statistics project a bleak figure of only 1.5% of engineers in India being fit for new-age jobs. More than 60% of fintech companies in India report a shortage of skilled employees, mainly in IT, engineering and sales services.

In the past couple of months, many fintech startups have raised funding either planning to hire more talents (engineers), launch new products and services or expand into new geographies.

For instance, Bengaluru-based fintech unicorn slice is planning to close $55 Mn. People aware of the development told Inc42 that the startup is raising the fresh round at a valuation between $1.8 Bn and $2 Bn. The round will see participation from existing investors such as Tiger Global, Insight Partners with some new investors.   

Fintech platform Stockal raised $9 Mn in its Series-A funding round earlier in April from investors including Hashed, PEAK6, ARC Group Ventures, Trica, 7Square, AZ Ventures, Czar Capital and Riso Capital. The capital will be used for international expansion.

Vested Finance raised $12 Mn in a Series A funding round in April led by Ayon Capital. Existing investors Tenoneten, Ovo Fund, Wedbush Ventures, IPV, and Upscale also participated in the funding round.

In March, fintech startup Money View raised $75 Mn in its Series D funding from Tiger Global, Winter Capital, Evolvence India, and Accel. The startup is now valued at $625 Mn. The capital will be used to acquire new talent, scale up the credit business, and expand its product portfolio.

Meanwhile, India’s overall fintech market opportunity is estimated to be $1.3 Tn by 2025, growing at a CAGR of 31% during 2021-2025, according to a report by Inc42. 

Of this, lending tech is likely to account for 47% ($616 Bn), followed by insurance tech at 26% ($339 Bn) and digital payments at 16% ($208 Bn). 

Among these three, insurance tech is the fastest-growing fintech sub-segment in terms of market opportunity, growing at a CAGR of 57%, followed by investment tech (44%) and fintech SaaS (40%).